Vital, "painful" changes to the health service will need billions of pounds of extra funding if a revolution of the NHS is to be achieved during the next parliament, its outgoing chief executive said.

Sir David Nicholson, who steps down at the end of the month after eight years in charge and 36 years in the health service, warned that without the money the NHS will struggle to survive on recent austerity-driven budgets.

In an interview with the Guardian he called for a "change fund" on top of the health service's annual £110 billion budget to help pay for its reformation.

The industry-wide changes required would be "huge, massive (and) unprecedented", he said, and would be "painful for staff" and difficult for the public to accept.

But without them future NHS leaders would preside over a "managed decline".

Sir David said: "I don't think the wheels are going to come off tomorrow. But we'll see a position where people have to reduce the number of nurses on the wards and have to reduce the drugs that we give to people.

"I can see all of those things happening unless we embrace this change."

The reformation - to delivery of care rather than the structure of the health service - is vital to ensure the NHS can cope with increasing demand, he said.

Among the key changes is the need for a major centralisation of hospital services to improve quality of care.

Sir David suggested that instead of every hospital having a traditional accident and emergency unit, there would be "between 40 and 70 major emergency centres across the country, with all other centres feeding into them in a network".

That would not mean those other hospitals losing their emergency departments altogether, he said, but they would no longer deal with the most serious of cases.

"The others will (still) take 70% or 80% of the patients who currently turn up at A&E units and treat them as normal."

The 300 organisations that provide specialised NHS services, such as cardiac or cancer care or organ transplantation, should be reduced to between 15 and 30.

A large proportion of hospital care should also be transferred to community settings to help the NHS cope with an ageing population, a rise in patients with one or more long-term condition such as asthma or diabetes, and demand for new treatments. GP services should also be available every hour of every day.

Sir David told the Guardian: "We know this change can be done. And we know that more preventive work in the community reduces demand on hospitals and that concentrated specialised services leads to better outcomes for patients.

"But it's hard to imagine doing all those things without some financial flexibility to enable us to do that, some kind of change fund that would enable us to do that."

This extra money would allow existing hospitals to be run while new services are created in the community.

Sir David said that without the overhaul there could be a decline in quality in the NHS, which could lead to a collapse in public support for the health service and a rise in private healthcare.

He said it was "unavoidable" that the next government would have to find extra money to fund the changes.